Gosselin v. Ontario Bank

Gosselin v. Ontario Bank

Majority held that where a sale of goods is subject to a suspensive condition retaining ownership until payment and the shipping documents are consigned to the vendor, a third party who takes the bills without the vendor's endorsement and without establishing a clear title takes subject to the vendor's rights; however, when a bank obtains ocean bills and advances contemporaneously and in good faith it may acquire title. Applying these principles the Court allowed the vendor's appeal in part, holding the bank liable for certain cars where it had not taken the bills and advances in good faith and contemporaneously, and dismissed the bank's cross-appeal.

Citation
(1905) 36 SCR 406
Parties
Appellant / Plaintiff: Francois Gosselin; Respondent / Defendant: The Ontario Bank
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
14 June 1905
Procedural Posture
Civil Appeal / On Appeal — Final Judgment of Supreme Court of Canada
Outcome
Appeal allowed in part; cross-appeal dismissed
Legal Topics
Bills of Lading, Suspensive Condition, Revendication (recovery of Goods), Pledge and Security, Possession and Delivery, Good Faith of Purchaser, Rescission of Sale, Notice and Endorsement of Documents
Source Language
English
Sale of Goods Banking Law Property Law Contract Law Agency and Bailment Insolvency and Bankruptcy Commercial Law Bills of Lading +7 more

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Parties

Francois Gosselin

Appellant / Plaintiff

The Ontario Bank

Respondent / Defendant

Procedural Posture

Civil Appeal / On Appeal — Final Judgment of Supreme Court of Canada

Legal Issues

  1. 1 Whether consigning inland shipping receipts/bills of lading to the vendor's name constituted retention of ownership under a suspensive condition
  2. 2 Whether a purchaser/pledgee (the bank) who takes bills not indorsed by the consignee acquires title or takes subject to the consignee's outstanding rights
  3. 3 Whether advances made by a bank in the ordinary course and contemporaneously with receipt of ocean bills can vest title in the bank despite prior consignments to the vendor

Ratio Decidendi

Majority held that where a sale of goods is subject to a suspensive condition retaining ownership until payment and the shipping documents are consigned to the vendor, a third party who takes the bills without the vendor's endorsement and without establishing a clear title takes subject to the vendor's rights; however, when a bank obtains ocean bills and advances contemporaneously and in good faith it may acquire title. Applying these principles the Court allowed the vendor's appeal in part, holding the bank liable for certain cars where it had not taken the bills and advances in good faith and contemporaneously, and dismissed the bank's cross-appeal.

Court Disposition

Appeal allowed in part; cross-appeal dismissed

Orders

  • Ontario Bank to pay appellant the sum of $3,104.43 with interest from June 7, 1894, and costs in all the courts
  • Cross-appeal of Ontario Bank dismissed with costs